The pension fund is a group of assets, created on a contract basis, without legal personality, therefore it is not subject to income tax or value added tax. The taxation of the Fund is based on Law no. 8438, dated 28.12.1998 “On income tax” as amended, and the bylaws issued in its implementation.
In accordance with law no. 10 197, dated 10.12.2009, on Voluntary Pension Funds, Article 88:
Contributions made by the employer in the interest of his employees in a professional pension plan are estimated as operating expenses, up to the annual amount for each employee, equal to ALL 250,000, and this amount is estimated as a deductible expense, for employer’s profit tax purposes.
Any payment received by a member of the Fund at the moment he meets the legal requirements for benefit is taxed with personal income tax.
If the Fund member seeks to withdraw the assets accumulated in his individual account without meeting the legal criteria to benefit, this is considered as an early withdrawal. Early withdrawal is accompanied by penalties, which are calculated in relation to the time fulfilled by the member from the moment of his first contribution on the first voluntary pension fund, until the moment of early withdrawal
In case of early withdrawal, the Management Company will apply penalties which will be calculated on the net value of the assets required to be withdrawn prematurely after the tax has been deducted according to the legislation in force at the time of withdrawal. The concrete percentage of the penalty for each case according to the definitions above, will be calculated proportionally depending on the period of contributions:
At the legal age of receiving the voluntary pension, the client has the opportunity to withdraw his pension fund in the total amount immediately or periodically at his request.
For the purpose of calculating the penalty of early withdrawal as the date of the first contribution will be considered the first date of payment of the contribution to the first pension fund
The taxation of the Fund is based on Law no. 8438, dated 28.12.1998 “On income tax” as amended, as well as bylaws in its implementation. Income derived from securities is considered a taxable source of income for the purpose of applying personal income tax. The investor is taxed only on the added value of the fund, at the moment of withdrawal.